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We describe a two-step algorithm for estimating dynamic games under the assumption that behavior is consistent with Markov perfect equilibrium. In the first step, the policy functions and the law of motion for the state variables are estimated. In the second step, the remaining structural parameters are estimated using the optimality conditions for(More)
supports research bearing on economic and public policy issues. The SIEPR Discussion Paper Series reports on research and policy analysis conducted by researchers affiliated with the Institute. Working papers in this series reflect the views of the authors and not necessarily those of Abstract Internet auctions have recently gained widespread popularity and(More)
Internet auctions have recently gained widespread popularity and are one of the most successful forms of electronic commerce. We examine a unique dataset of eBay coin auctions to explore the determinants of bidder and seller behavior. We first document a number of empirical regularities. We then specify and estimate a structural econometric model of bidding(More)
Inspired by facts from the private-sector construction industry, we develop a model that explains many stylized facts of procurement contracts. The buyer in our model incurs a cost of providing a comprehensive design and is faced with a tradeoff between providing incentives and reducing ex post transaction costs due to costly renegotiation. We show that(More)
Ahmet Arzan and Derya Tamerler for helpful discussions about the Turkish Treasury auction system. Financial Abstract An important question in the theory of divisible good auctions is to determine whether a discriminatory auction yields higher revenues to the auctioneer than a uniform price or Vickrey auction. This question can be answered empirically using(More)
We study the identification and estimation of preferences in hedonic discrete choice models of demand for differentiated products. In the hedonic discrete choice model, products are represented as a finite dimensional bundle of characteristics, and consumers maximize utility subject to a budget constraint. Our hedonic model also incorporates product(More)
We study the estimation of static games of incomplete information with multiple equilibria. A static game is a generalization of a discrete choice model, such as a multinomial logit or probit, which allows the actions of a group of agents to be interdependent. While the estimator we study is quite flexible, we demonstrate that in most cases it can be easily(More)
The MIT Faculty has made this article openly available. Please share how this access benefits you. Your story matters. Abstract We discuss the identification and estimation of discrete games of complete information. Following Bresnahan and Reiss (1990, 1991), a discrete game is a generalization of a standard discrete choice model where utility depends on(More)
Should the buyer of a customized good use competitive bidding or negotiation to select a contractor? To shed light on this question, we consider several possible determinants that may influence the choice of auctions versus negotiations. We then examine a comprehensive data set of private sector building contracts awarded in Northern California during the(More)
Recently, economists have developed methods for structural estimation of auction models. Many researchers object to these methods because they find the rationality assumptions used in these models to be implausible. In this paper, we explore whether structural auction models can generate reasonable estimates of bidders' private information. Using bid data(More)